Synergy Pharmaceuticals (SGYP) Stock: When Enough Is Enough

As Synergy Pharmaceuticals (SGYP) trudges its way through economic difficulty, the company has more unfortunate news up ahead — BTIG’s analyst Tim Chiang is no longer betting on the stock, downgrading to a Neutral rating without providing a price target. (To watch Tim Chiang’s track record, click here)

The company’s lead drug Trulance, which helps those with irritable bowel syndrome (IBS) and constipation, is not hitting expected sales targets for the year or getting any financial support or offers for partnership. This is putting the company at an economic disadvantage. Therefore, Chiang sees the company’s value going down the toilet.

“While we had been aware of the challenges the Co. was facing with the launch of Trulance, the lack of any interested parties willing to acquire or partner with SGYP is surprising, especially with the recent progress the Co. has made in securing formulary access. It is with a heavy heart that we downgrade the stock after the shares have dropped more than 40% in the post market, but we think the options for the Co. going forward may be limited with bankruptcy a potential scenario,” Chiang said.

The analyst lowers the calendar year revenue forecast to $43M (from $60M) and announces a new loss per share estimate at $0.53, down from $0.46.

“We believe the uncertainty with the Co.’s funding requirements is likely to pressure the equity value. As a result, we can no longer recommend the shares,” Chiang said.

Net-net, out of four analysts who are keeping an eye on this biotech stock, TipRanks finds three are sidelined – rating the stock a Hold, while only one is Bullish. The consensus price target, $4.50 is rather optimistic when comparing it to the actual price per share, which stands at $0.48 showing an upside of 837.50% (See SGYP’s price targets and analyst ratings on TipRanks)


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